Galway business breathed a sigh of relief this week when it emerged that the commercial rates would only increase by one per cent instead of the three expected. The minimalist move was welcomed by IBEC West and the Galway Chamber of Commerce.
In the run up to the Galway City Council budget, there were fears the commercial rates would be increased by c3.3 per cent. At Monday’s city council meeting, the rate proposed was even higher at 3.8 per cent.
Councillors had said before the meeting that in the current economic climate that it would be harmful to business in the city to have such a hike in the rates.
As a result, Monday’s meeting was adjourned for an hour as all 15 councillors met to discuss the rates. They proposed only a one per cent increase to which the city manager Joe MacGrath and his officials agreed - possibly the lowest increase in the commercial rate even seen in any Galway budget.
The minimal hike in the rate has been widely praised by businesses across Galway city. IBEC West called it a “a very welcome development”, especially as businesses are major contributors to the €89 million budget of Galway City Council as €34 out of every €100 spent by the council is sourced from ratepayers.
‘At a meeting with the Galway City Council in November we stressed that decisions taken in the 2009 budgetary process would have critical significance on the ability of businesses in Galway to remain competitive,” said IBEC West regional director John Brennan. “Companies across the west are identifying savings and cutting costs. I believe the onus is on local authorities to identify efficiencies in their own expenditure rather than simply increase charges to raise revenue.”
The Galway Chamber of Commerce also welcomed the one per cent increase as a “responsible decision by councillors and officials to the difficulties facing business in Galway at this time”.
“We had put it to the councillors that their options were very clear,” said chamber president Paul Shelly. “Take a short-term ‘balance the books’ approach and risk driving business and jobs away or take a longer term ‘strategic approach and ensure that Galway remains a place where businesses want to come to, where job opportunities remain plentiful and where business people feel their spirit of enterprise is rewarded.”
However the chamber was critical of the Government for reducing the Local Government Fund to Galway by 6.9 per cent (€674,000 ).
“This decrease meant that councillors had to increase the commercial rates,” said chamber CEO Michael Coyle. “If Government had acted responsibly and not cut the allocation, then the councillors may have been able to cut rates.”
